Losses soar as Lucent axes 7,000

Monday 22 July 2002 23:00 BST

US telecoms equipment group Lucent is to cut another 7,000 jobs, blaming the unrelenting slowdown in demand among its customers. The group also posted third-quarter losses running at nearly £60m a day - and declined to forecast its performance for the three months ended September.

Losses for the June quarter ballooned to $7.91bn (£5.25bn) from $3.24bn in the year-earlier period. Sales fell to $2.95bn, down 45% on the year and 16% on the preceding three months.

The figures include charges of $808m to pay for the job cuts, which were expected to save the company $700m a year. On top of the 7,000 staff axed, Lucent plans to eliminate another 1,000 jobs through attrition, outsourcing and sales of businesses to reduce its work force by 15% by the end of the year. It employed 53,000 at the end of June. Lucent also took a $1.70 a share charge relating to deferred tax assets.

Excluding one-off charges, Lucent narrowed its losses to 16 cents a share from 39 cents a year earlier. Lucent said conditions were too uncertain to allow it to forecast its final-quarter performance. But it repeated its plan to return to profit by this time next year.

AT&T says third-quarter earnings could be double what the pundits have forecast, after topping predictions with its second-quarter figures. But bottom line losses have ballooned to $12.7bn after AT&T took a $13.1bn charge to write down assets in line with a goodwill accounting change.